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Why Mexico’s Manufacturing Activity Improved in March

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Apr. 25 2018, Updated 2:46 p.m. ET

Mexico’s manufacturing purchasing managers’ index

According to Markit Economics, Mexico’s (EWW) manufacturing activity improved in March, with its manufacturing PMI (purchasing managers’ index) rising to 52.4 from 51.6 in February. The PMI figure exceeded the market expectation of 52.

Mexico’s March manufacturing PMI was driven by the following factors:

  • Production output and volumes rose at a higher rate.
  • New and export orders rose at a faster pace as international demand improved.
  • Employment in the manufacturing sector rose strongly.

Donald Trump’s announcement about import tariffs on steel and aluminum in March was expected to have an economic impact on Mexico, a major steel exporter to the United States. However, Trump’s later decision to relax tariffs for Canada and Mexico improved investor sentiment.

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Performance of ETFs in March

The iShares MSCI Mexico Capped ETF (EWW), which tracks the Mexican economy, rose 3.2% in March. However, the Global X FTSE Southeast Asia ETF (ASEA), which tracks Southeast Asia’s economy, fell marginally, by 1.3%. In the next part of this series, we’ll analyze Russia’s manufacturing PMI in March.

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